Now that the debt ceiling legislation passed by Congress has been out for three days, our congressmen and media are starting to read the bill. The details of the bill are starting to emerge and the public backlash is forming as our government has spent $329 billion in just one day since its passage. Our debt to GDP is 98.3% but this figure does not include mandated unfunded liabilities which puts our true debt to GDP ratio at 785.41%. This is Portugal, Italy, Ireland and Spain combined on steroids.
Congress fled Washington after the vote without addressing other important issues such as the continued funding for the FAA. This will cost the government $1.2 billion in uncollected fees:
Caught up in the partisan acrimony are nearly 4,000 FAA employees who have been furloughed. The FAA also has issued stop work orders on more than 200 construction projects, threatening the jobs of thousands of other workers. Air traffic controllers, however, remain on the job.
If the “Supreme Congress” does not address spending cuts by December 23rd, automatic cuts in the military and discretionary spending will take effect. Based on past performance, a partisan committee in Washington achieving any goal is known as a sucker’s bet. With our economy heading back into recession, the grinch who stole Christmas this year is our government, not just the president.
If the impact of stimulus programs and inflation are considered, we never came out of the recession. The price of gold foreshadows the future of the world and no one is placing their faith in the sucker’s bet known as the United States economy.
Debt Deal – Christmas Crisis
The debt deal that President Barack Obama signed on Aug. 2 sets up the economy for what might be called a Christmas crisis: If the congressional super committee that’s supposed to negotiate more cuts doesn’t reach an agreement by Dec. 23, some big spending reductions take effect automatically, sapping demand from an economy that’s already starved for it. Macroeconomic Advisers, a St. Louis-based forecasting service, said on Aug. 1 that the combination of agreed-upon spending caps and cuts required by the fallback mechanism — if it’s triggered– could sap 0.8 percentage points from economic growth in fiscal 2013, which begins in October 2012.